Oil prices fall on global equity selloff
Market watch top headlines
Australian reports
- Aust markets: Stocks end higher on jobs surge
- Aust dollar report: $A reaches four-month high on jobs data
- Aust credit close: Bonds mixed after Japanese auction
World reports
- World commodities: Crude oil prices fall
- World markets: Wall St lower on European debt fears
AAP
2009-11-20
NYMEX - A global selloff on equity markets dragged down crude prices by nearly three per cent on Thursday, the first decline this week.
The price for a barrel of crude dropped by more than $US1 immediately when US markets opened, with the Dow Jones industrials giving down 130 points. Markets in Asia and Europe fell early in the day.
Also pushing oil prices lower was a strengthening dollar. Crude prices have risen steadily this year as the dollar lost value against the euro. Because oil is bought and sold largely in dollars, someone holding euros can essentially by more crude for less.
Since the beginning of February, the dollar has lost more than 16 per cent of its value against the euro. The dollar gained one cent against the euro on Thursday which created less of an incentive to buy crude.
Benchmark crude for December delivery gave up $US2.12 to $US77.46 a barrel with one day remaining for the contract on the New York Mercantile Exchange. Most of the trading already moved to the January contract, which lost $US2.05 to $US78.05.
With oil near $US80 per barrel, consumers are starting to feel the pinch. Refiners must buy crude at higher prices even though demand for jet fuel, diesel and gasoline is weak. So they have cut operating rates to below 80 per cent.
That is more in line with operations after a hurricane hits refiners on the Gulf Coast.
That may already have put a floor under fuel prices, which could play out in the spending and saving rates for consumers.
In other Nymex trading, heating oil fell 3.22 cents to $US2.0164 a gallon. Gasoline for December delivery fell 5 cents to $US1.9614 a gallon. Natural gas for December delivery added 2.4 cents to $US4.278 per 1,000 cubic feet.
In London, Brent crude for January delivery dropped $US2.29 to $US77.18 on the ICE Futures exchange.
COMEX - In New York trade overnight, gold for December delivery settled up $US0.70 at $US1,141.90 per fine ounce.
December silver settled up four US cents at $US18.455 per fine ounce, while December copper fell, by 2.95 US cents to $US3.0810 per pound.
